Asset Category

Stocks, like cash and receivables, are considered financial assets. The middle ground between real and intangible assets, financial assets are liquid assets that have a stated and documented value. The documentation can come in the form of a piece of paper or computer file, and it can be a claim of ownership of an entity or a contract declaring one’s right to payment. In particular, stocks have no expiration date, so they can be held indefinitely or sold to others.

Cryptocurrencies, on the other hand, are often classified under intangible assets or assets that lack physical substance, though some people also insist that these are likely security, which is a financial instrument. The truth of the matter is that the technology behind cryptocurrency is still changing and far ahead of the standards that financial institutions currently use, so it exists in a gray area.

The values of intangible assets are recorded at acquisition cost or the price that the owner paid to own them. You need to use a digital wallet if you’re planning to dabble in cryptocurrencies. If you’re investing in Monero (XMR), you have to use the best Monero wallet—XMRWallet.com is a good option—to store the units you’ve acquired. The way these assets are categorized can have a big impact on your portfolio, as this will determine the level of risk you assume and the financial responsibilities you need to fulfill with every acquisition.

Ownership and Possession

Stocks are issued by specific groups, and compared to cryptocurrencies, owning this type of asset is a more stringent process. Stocks are created as a means to raise funds for a company, and they are expected to turn a profit. Before they’re made public, stock offerings must first be cleared by government agencies and undergo auditing. After that, they can be traded on investment applications, and retail investors can buy shares sold by the companies they favor. If you want to cash out, you have the option of selling your shares at a good price to another investor.

Cryptocurrencies are founded on the idea of decentralized finance, so the process of acquiring digital coins isn’t as restrictive. As long as you have capital and the digital instruments needed to trade and store digital coins, you can acquire tokens from your preferred currency and trade them as well. If you want to cash out your crypto investment, it’s likely that you have to make multiple trades to do so, especially if you’re aiming to exchange them for fiat money.

Level of Volatility and Assumed Risks

In general, stocks are a much safer investment than cryptocurrencies. This type of asset is backed by public and private institutions, and there are laws and regulatory bodies that are aimed to protect the rights of the investors in case something goes awry during the process. Also, this asset type has a significant impact on the economy. As such, it’s unlikely to see high levels of volatility on stock prices unless there are significant events that are influencing the business itself or the general economic activity.

In contrast, cryptocurrency investors have to deal with high levels of volatility and numerous risks, and this can be a bane or a boon for investors. Early adopters of crypto tokens like Bitcoin, for example, have seen their capital grow multiple times in the past decade. From just about USD 1 per unit in 2011, a single Bitcoin now costs around USD 57,000. Monero also used to be available at USD 13 in 2017, but these days, the coin’s price ranges between USD 110 to USD 500.

Those who have put their money into these currencies when they were still at rock-bottom prices and held on to their investments were able to increase their profits significantly. However, it’s worth noting that there are tens of thousands of cryptocurrencies in the market today, and it’s highly likely that some of these currencies will not thrive. As such, investors who put their money on digital currencies should be careful when choosing the coins they want to invest in.

What are your financial plans, goals, and strategies? If you want to play it safe and enjoy the protection offered by laws and establishments, then putting your money on stocks seems like a good fit. If you’re willing to take on more risks for the chance of getting better rewards, then crypto should make a good addition to your portfolio.

The post What’s the Difference Between Cryptocurrencies and Stocks? appeared first on TechReviewsCorner.

Stablecoins backed by fiat currencies are specifically pegged to the value of that asset and cannot fluctuate much (or at all).

Ones backed by assets like precious metals will never fall below the spot or base price of the reserve but might actually surge in value if market conditions are right. 

Stablecoins are a popular investment choice for investors eager to mitigate volatility and risk with their investments. They are often utilized as a safe haven in times of economic uncertainty or high inflation.

Stablecoins are also deployed to purchase cryptos on exchanges that do not accept fiat.

The cryptocurrency market has seen major changes in 2020. Assets like Chainlink surged out of obscurity, while the continued rise of decentralized finance (Defi) has revolutionized the digital currency world forever.

Many crypto enthusiasts and investors remain curious about which stablecoins remain on the rise in 2020. Which assets should be paid close attention to? Here’s a list of the top five stablecoins currently on the market and on the rise this year. 

DAI: Created by MakerDAO, DAI is one of the most unique stablecoins available. Running on Ethereum, the coin is actually backed by collateral on Maker’s platform while maintaining a value of $1 per coin. DAI’s unique structure makes the coin appear more transparent than other options, as the cryptocurrency can only be created and destroyed by users. In order to protect against market changes and conditions with the leading global fiat currency, DAI relies on margin trading. 

Paxos Standard: The PAX stablecoin is another intriguing option that has rapidly gained popularity since its launch. More than 40 exchanges offer the coin, which remains one of the most heavily adopted tokens in the stablecoin world. Backed by the U.S. Dollar at a 1:1 ratio, reserve currency is held at FDIC-insured banks in the United States. The stablecoin has also been approved by the New York State Department of Financial Services, giving the coin great legitimacy in the digital currency world. 

PalladiumCoin: Stablecoins backed by gold or silver might seem more alluring, but palladium is one of the globe’s most valuable and expensive metals. PalladiumCoin.com lets holders buy, sell, and trade coins backed by palladium, an essential component in a car’s catalytic converter. Its use in turning toxic gases into less harmful elements has sent the price of palladium soaring. Users who purchase the cryptocurrency (in fractional amounts) have the option of redeeming for 99.9% palladium from a secure storage location. PalladiumCoin.com is an ERC-20 stablecoin able to be held with a variety of popular and secure crypto-wallets.

USDCoin: USDCoin is the result of a joint venture between Coinbase and Circle. Distributed on the Ethereum blockchain, each USDC is pegged to the U.S. Dollar at a 1:1 ratio. The coin is a popular option for stablecoin investors and enjoys high trade volume due to its unique tokenization process. Anyone who is interested in acquiring USDC can send dollars to the issuer’s bank account. A smart contract is then issued to send the proper amount of USDC tokens while keeping dollars in reserve. The simple and effective process makes minting new USDC tokens an easy task. The partnership with financial services company Circle has helped the coin attract entities like Goldman Sachs. 

EOSDT: The EOSDT coin is the asset of the Equilibrium smart contract platform. The coin is unique as it is the globe’s first decentralized stablecoin built on the EOS blockchain. While each EOSDT is pegged to the U.S. Dollar, the coin is unique as users can choose the underlying asset for generated EOSDT. Collateralization options are set into the smart contract once a user takes advantage of the Equilibrium platform to generate coins. Ensuing tokens can be stored, exchanged for other options, or sent as payment for goods and services. The unique nature of EOSDT makes the stablecoin a rising option in the world of cryptocurrencies backed by assets. 

Also Read: Teleworking In Digital Marketing

From 2020 And Beyond, Stablecoins Look To Remain Popular

Many stable coins have posted triple-digit market growth across 2020. USDC coin alone has enjoyed a supply jump of at least 250% since the start of the year. Projections are stablecoins will continue to remain in the public eye, especially as entities like Facebook look to offer their own tokenized money options for consumers.

One stablecoin project, Finality, which is spearheaded by UBS Group, estimates now it will receive approval for its coin by Q2 2021. The race appears to introduce new stablecoins into the market – boosting the industry’s prospects overall.

Also Read: Digital Buzzwords You Should Know In 2020

The post Top Five Stablecoins On The Rise In 2020 appeared first on TechReviewsCorner.